SEC approves 11 bitcoin ETFs – 01/10/2024 – Market

The SEC, the body that regulates the capital markets in the United States, approved this Wednesday (10) the first bitcoin exchange-traded funds (ETFs), in a decision that could attract institutional and retail investors to the cryptocurrency market.

The body authorized 11 requests from financial companies to offer exchange-traded funds linked to the digital asset, a potentially simpler way for people to invest in cryptocurrencies through traditional platforms like Nasdaq.

Some of the largest financial companies in the world, including asset managers BlackRock and Fidelity, were authorized to offer the products starting this Thursday (11).

The decision was praised as a sign that traditional financial institutions remain willing to use digital currencies even after 18 months of market crashes and high-profile bankruptcies.

Since October, the price of bitcoin has risen more than 60% as investors bet that the SEC’s support for new crypto products would give the industry a stamp of regulatory legitimacy, attracting new investments from professional and amateur wealth managers.

The price of bitcoin soared this Tuesday (9) after the SEC’s official X account announced approval of ETFs, but quickly fell when Gary Gensler, chairman of the SEC, said the agency’s account had been hacked.

But the sector only had to wait until this Wednesday, when the SEC authorized the products in a regulatory process. The long-awaited announcement brings a pillar of the traditional financial system into the experimental world of cryptocurrencies.

Widely offered by financial firms such as Charles Schwab and Vanguard, ETFs are baskets of assets divided into shares that can be bought and sold on the open market — a form of investment popular among wealth managers who control trillions of dollars in capital.

Instead of storing bitcoins in online wallets, investors in bitcoin ETFs will own shares in funds containing the digital currency.

Investors would have exposure to the cryptocurrency market without some of the risks and drawbacks historically associated with the technology.

“This creates a bridge to the traditional financial market,” said James Seyffart, a Bloomberg analyst who follows ETFs. “In the long term, I believe the money will come in.”